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Egypt Launches $8.5 Billion Suez Canal Expansion

In this picture provided by the office of the Egyptian Presidency, President el-Sissi smiles at a boy dressed in a tiny military uniform as he waves the national flag from a monarchy-era yacht that sailed to the venue of a ceremony for extension of the Su

Egypt has opened a major expansion of the Suez Canal that President Abdel-Fattah el-Sissi has billed as an historic achievement needed to boost the country's ailing economy after years of unrest.

At an elaborate ceremony in the canal city of Ismailia, the president addressed the terrorist threat surrounding the project.

"Work did not take place in normal circumstances, and these circumstances still exist and we are fighting them and we will defeat them," Sissi said after signing an order allowing ships to cross the new stretch of waterway.

The $8.5 billion extension involved digging and dredging 72 kilometers of the 193-kilometer canal and making a parallel waterway to facilitate two-way traffic, according to the Associated Press.

The government said it will more than double the canal's annual revenue to $13.2 billion by 2023.

But some economists and shipping analysts question whether there is sufficient traffic and east-west trade to meet the ambitious revenue targets.

A general view of the Suez Canal is seen from al-Salam "Peace" bridge on the Ismalia desert road before the opening ceremony of the New Suez Canal, in Egypt, Aug. 6, 2015.

Foreign dignitaries attend inauguration

Wearing a ceremonial military uniform and trademark sunglasses the president arrived for the opening ceremony on a military helicopter and boarded a monarchy-era yacht to cruise the canal. The yacht was flanked by navy warships as aircraft flew over, while Sissi, waved to well-wishers and folklore dance troupes performing on shore.

Among those at the ceremony that followed were French President Francois Hollande, King Abdullah of Jordan and Bahrain's King Hamad bin Isa al-Khalifa. Palestinian President Mahmoud Abbas, Kuwait's Emir Sheik Sabah al-Ahmed al-Sabah and Greek Prime Minister Alexis Tsipras also attended.

The canal expansion is the centrepiece of a grand agenda to lift the most populous Arab nation out of poverty and secure Sissi's grip on power after he ousted Egypt's first freely elected civilian President Mohamed Morsi of the Muslim Brotherhood in 2013 following mass protests.

Mark Snowiss is a Washington D.C.-based multimedia reporter. He has written and edited for various media outlets including Pacifica and NPR affiliates in Los Angeles. Follow him on Twitter @msnowiss and on Google Plus.